:00:16. > :00:21.London - arguably the capital city of the world with an economy built
:00:21. > :00:27.on financial and other business services. Know where in Europe can
:00:27. > :00:33.match the money-making formula which you will find around here.
:00:33. > :00:37.The city is absolutely definitely a prize asset. But the capital has
:00:37. > :00:41.problems, too. We have become dependent on the risky business of
:00:42. > :00:47.banking. And we find ourselves with too few jobs in other industries.
:00:47. > :00:50.There are not enough jobs to go around. London is at a turning
:00:50. > :00:56.point. The growth and success it has enjoyed for decades can no
:00:56. > :01:01.longer be taken for granted. It is no wonder that at a difficult time,
:01:01. > :01:11.people are asking a difficult question. What shape do you want
:01:11. > :01:16.
:01:16. > :01:20.Tonight, we are at the Museum of London in the centre of the Square
:01:20. > :01:24.Mile. We are going to have a discussion you do not normally here.
:01:24. > :01:30.We are dispensing with the usual chat about our economy. We are
:01:30. > :01:33.going to ask how we want our economy to evolve over the next two
:01:33. > :01:38.decades. You do not need me to remind you what has dominated over
:01:38. > :01:46.the last two. Let me start by asking you, do we want more of the
:01:46. > :01:50.same? I am Nicola Horlick. I have been a fund manager for 29 years. I
:01:50. > :01:54.am taking part in this programme because I feel very strongly that
:01:54. > :01:58.somebody does need to stand up and defend financial services and
:01:58. > :02:02.banking and there seemed to be very few people who are prepared to do
:02:03. > :02:09.that. Just looking at the statistics, we cannot do without
:02:09. > :02:14.financial services in this country. The city is absolutely deaths --
:02:14. > :02:18.definitely a prize asset. London relies on the financial sector.
:02:18. > :02:22.Virtually every major bank in the world has some sort of office in
:02:22. > :02:31.London and it does employed a huge number of people across the south-
:02:31. > :02:35.east. We have to compete on a global stage and make sure we
:02:35. > :02:41.safeguard that industry and protect it and encourage it to grow further,
:02:41. > :02:47.rather than trying to undermine it. Encourage it to grow further,
:02:47. > :02:52.rather than undermine it. Nicola, is there really potential for the
:02:52. > :02:57.city to grow more? I thought it had outgrown itself over the last ten
:02:57. > :03:01.years. It ends than flows because we have our ups and downs and
:03:01. > :03:05.markets. When it goes down people sadly lose their jobs. Overall, I
:03:05. > :03:09.believe it can grow further because there are places in the world which
:03:09. > :03:14.are growing. They are buying financial services. Their companies
:03:14. > :03:20.are growing. They need to be financed. People will save more in
:03:20. > :03:24.the Far East as those economies evolve. I'm a fund manager. I'm
:03:24. > :03:29.best people's savings and that is an industry with that will grow as
:03:30. > :03:34.wealth grows around the world. Philippe Legrain, you're an
:03:34. > :03:39.Economist. Financial services, could it be yet bigger? It could be
:03:39. > :03:44.but it shouldn't be? The city needs to be simpler. It needs to be safer
:03:45. > :03:48.and no longer subsidised by the tax payer. That means it needs to be
:03:48. > :03:55.smaller. London is overly reliant on a dangerously unstable activity,
:03:55. > :03:59.a large part of which involves at extracting value. That is
:03:59. > :04:04.particularly true of fund management. Fund managers capture
:04:04. > :04:08.most of the gains from the funds which are invested with them.
:04:08. > :04:12.both agree it is possible for the city to grow. Let's ask Owen Jones
:04:12. > :04:19.whether it is desirable. You wrote Chavs - The Demonisation Of The
:04:19. > :04:24.Working Classes. Do the benefits of the city trickle down to ordinary
:04:24. > :04:29.Londoners? Absolutely not. London has become one of the most unequal
:04:29. > :04:36.cities on the face of the planet. It is a stunning division of wealth.
:04:36. > :04:39.The top 10 % of Londoners are now worth 273 times the bottom 10 %. If
:04:39. > :04:44.you go to Tower Hamlets, you can see the Grand spires of Canary
:04:44. > :04:48.Wharf, huge pockets of affluence and gentrification surrounded by
:04:48. > :04:53.massive amounts of poverty. Tower Hamlets being one of the poorest
:04:53. > :04:56.boroughs in the country. It is not creating jobs and wealth for many
:04:56. > :05:03.average Londoners who are living in some of the worst poverty in the
:05:03. > :05:07.entire country. Jane Ellison, Conservative MP for
:05:07. > :05:11.Battersea? Why do not agree with that picture. There are people
:05:11. > :05:15.earning a lot of money but what everyone forgets is the city is
:05:15. > :05:19.supporting lots and lots of people who are doing jobs which are not
:05:19. > :05:24.financial services or telephone- number salaries. A lot of people in
:05:24. > :05:27.my constituency work in mid-level jobs which are support services, IT,
:05:27. > :05:34.marketing. The city is just far more than the people we see
:05:34. > :05:40.dominating the headlines. Let's get some views from our audience.
:05:40. > :05:44.Although the city has helped London, it is clear that we have a mixed
:05:44. > :05:51.economy. For far too long we have had services. You have had loads of
:05:51. > :05:55.people lose jobs, not all people who work in financial services earn
:05:55. > :06:01.millions of pounds. I recall when everything crashed. Loads of people
:06:01. > :06:05.did not have a job the next day, with their ground -- their brown
:06:05. > :06:09.boxes. Now loads of money has been invested. I work in the public
:06:09. > :06:12.sector and loads of people lost their jobs that way. We need to
:06:13. > :06:20.have a mixed economy. The we are going to come to that very point in
:06:20. > :06:25.a few minutes. Patrick Nolan from the Reform think-tank. I need to be
:06:25. > :06:29.careful. There are some parts of the financial sector which may not
:06:29. > :06:33.have performed properly and we are doing work on Regulation but
:06:33. > :06:36.actually, financial services are important for all sorts of things.
:06:36. > :06:40.If you are manufacturing and selling to overseas markets, the
:06:40. > :06:44.time you agree a contract and the time you get the money, they can be
:06:44. > :06:49.a difference in which case currencies can move. You need to
:06:49. > :06:55.protect yourself against that. Nicola mentioned insurance. We
:06:55. > :07:00.cannot see it as a zero-sum game. Diane Abbott? We need to
:07:00. > :07:05.distinguish between that kind of city activity which is about
:07:05. > :07:10.investing and people who were just gambling with financial instruments
:07:10. > :07:14.and blew up the economy. It is all about balance and the sort of
:07:14. > :07:20.London we want to see. I am a huge admirer of Nicola but you cannot
:07:20. > :07:23.just have a London that is just for the very rich. We want to provide
:07:23. > :07:27.opportunities for everybody. The city does not provide many jobs for
:07:27. > :07:31.people in Hackney. Just to come back to a point bite your
:07:31. > :07:39.constituents. The minimum wage in this country is �6.08. To have a
:07:39. > :07:43.London living wage which the Mayor supports, it is �8.30. The service
:07:43. > :07:46.sector which is massively expanding, people are nowhere near the London
:07:46. > :07:53.living wage. They are living in poverty because the jobs are not
:07:53. > :07:56.that. You are presenting a very extreme picture. Absolutely not.
:07:56. > :08:00.You're not talking about hundreds of thousands of people in the
:08:00. > :08:05.middle who won neither very poor and I take your point about the
:08:05. > :08:10.London living wage, or extremely wealthy. There are a lot of people
:08:10. > :08:15.in middle whose jobs are very important and are working very hard.
:08:15. > :08:19.You do not improve London's economy by destroying one of its prize
:08:19. > :08:25.assets. Diane is right took a what it does in the future. I think that
:08:25. > :08:34.is an interesting discussion. Malik -- Shiv Malik, a book about -
:08:34. > :08:38.- author of Jilted Generation. Is there a business model which London
:08:38. > :08:43.has been pursuing, lots of wealthy people buying up bits of central
:08:43. > :08:48.London, is there a consequence for ordinary Londoners? Absolutely. If
:08:48. > :08:54.you're young and you live in London, you find yourself paying out 50 %
:08:54. > :08:59.if not more of your wages on rent. This is because we have a massive
:08:59. > :09:03.housing shortage in this country but especially in London. And of
:09:03. > :09:08.course, it is the rich who have been able to buy up lots of
:09:08. > :09:13.property in central London. They see it as a way of investing their
:09:13. > :09:17.money at a lower tax rate. So there is a connection between the city,
:09:17. > :09:23.the role that London has carved itself in the world and the fact
:09:23. > :09:26.that young people cannot afford a home? Exactly. We do not build much
:09:27. > :09:32.in London. When stuff has brought in from outside, it exacerbates the
:09:32. > :09:36.problem. Patrick Nolan, I want your view. We cannot continue with the
:09:36. > :09:41.idea that making rich people poorer will make us better off. We are not
:09:41. > :09:43.going to get a higher minimum wage if the country is poorer. If we
:09:43. > :09:48.have a well-functioning financial sector and people performing well
:09:48. > :09:51.and succeeding in the global market, we will be rich as the country. If
:09:51. > :09:56.we are richer we will have a stronger tax base and more
:09:56. > :10:00.resources for things like a minimum wage. We have got to reform the
:10:00. > :10:08.housing market. We should not make the country poorer to try and fix
:10:08. > :10:13.the housing market. By building houses we are creating an economy.
:10:13. > :10:16.Stunningly, it is not being done. What we need to do, you can see how
:10:16. > :10:20.an economy gets completely skewed if there are incredibly rich people
:10:20. > :10:25.at one end because you do not have the distribution going on that you
:10:25. > :10:29.need to create the jobs in other services. You end up with a Gucci
:10:29. > :10:32.economy or Ferraris being brought up at one end but nothing happening
:10:32. > :10:36.at the bottom which is what you want. You want people throughout
:10:36. > :10:40.the economy with some capital, some expenditure to go out there and
:10:40. > :10:44.boost the economy more widely. you have a living wage, poor people
:10:44. > :10:49.have more money in their pockets, they are more likely to spend it.
:10:49. > :10:55.If you give it to rich people they are more likely to save it. We can
:10:55. > :11:03.stimulate our economy with the living wage. There are not fairies
:11:03. > :11:13.printing money. As a country we have to earn away. -- earned our
:11:13. > :11:16.
:11:16. > :11:25.way. You seem to be forgetting,... A large part of the economy's tax
:11:25. > :11:31.base. It amounts to �100 billion a year. We are paying for the banks.
:11:31. > :11:35.They are not paying for us. That is a complete myth. I want to get a
:11:35. > :11:43.couple more thoughts from the audience. If you want to join the
:11:43. > :11:47.conversation on Twitter, used the hashtag # BBC London. Let me take
:11:47. > :11:53.the gentleman in the blue sweater. The Olympic village has been built
:11:53. > :11:58.with taxpayers' money. �900 million was spent on building the village.
:11:59. > :12:04.It was sold to a rich Consortium for �600 million. That could have
:12:04. > :12:08.been given to Newham Council, to Hackney council, to pass on to the
:12:08. > :12:14.homeless in those areas. It was desperately-needed by the homeless.
:12:14. > :12:19.And what happens? It is given to the rich. It is subsidised by the
:12:19. > :12:23.taxpayer. It is totally rubbish. That is what is happening. We are
:12:23. > :12:29.subsidising, the poor people are subsidising the rich. It has got to
:12:29. > :12:34.stop. OK. I want us to move on. Before we
:12:34. > :12:38.do, I want to reflect on the business model that we are talking
:12:38. > :12:43.about. Over the next 20 years, seeing the city, the professional
:12:43. > :12:48.services surrounding the city, not just financial services but legal,
:12:48. > :12:52.accounting, consulting, advertising, seeing that section grow and
:12:52. > :12:57.probably seeing the most -- most of the rest of London, people whose
:12:57. > :13:03.jobs are serving that, making their sand ridges, building and design in
:13:03. > :13:07.their homes. How many of you, this is completely unscientific, but I
:13:07. > :13:11.am interested in the mood of the audience, how many of you think
:13:11. > :13:14.that would be a perfectly good model for London, to see more
:13:14. > :13:24.growth in the professional and financial services sector? How many
:13:24. > :13:31.
:13:31. > :13:35.people think that would be a good London may be very dependent on the
:13:35. > :13:39.financial services but it wasn't always like that. In the 1950s,
:13:39. > :13:45.factories accounted for 40% of the capital's output and now it's down
:13:45. > :13:52.to below 3% and no where is that story more clearly told than in
:13:52. > :13:56.Dagenham where car production used to employ many many thousands.
:13:56. > :14:02.are so many unemployed in this area alone there's not enough jobs to go
:14:02. > :14:09.around. Ford has not benefited me at all. I have applied for their
:14:09. > :14:17.three times. They want qualifications. The rich are
:14:17. > :14:24.getting richer. You will be sorted for life. You have mums and dads.
:14:24. > :14:30.Of the people have not got anything and it's hard, you know. I am a
:14:30. > :14:40.mechanic by trade. I am willing to work. Friends of mine, in this
:14:40. > :14:50.
:14:50. > :14:53.local area, it's definitely going to get tougher. Shiv Malik, voices
:14:53. > :14:56.of youngish Londoners there. People who want jobs, probably not in the
:14:56. > :14:59.City. Blue collar jobs, factory jobs. Do you think factories are
:14:59. > :15:02.ever going to be viable in London again? Of course factories are
:15:02. > :15:05.going to be viable throughout the country. In London, I guess it's
:15:05. > :15:08.really a question of rates and how far, you know, businesses are
:15:08. > :15:12.willing to expend on kind of you know, on rent and stuff like that.
:15:12. > :15:15.But the question really for young people is for the last sort of ten
:15:15. > :15:18.years or so, even longer than that, they've been sold a kind of lie in
:15:18. > :15:26.the end. They've been told you know, education, education, education.
:15:26. > :15:28.That's the way to go. But Shiv. Shiv. Shiv. Shiv. Yeah. What about
:15:28. > :15:31.these young Londoners from Dagenham? They didn't go to
:15:31. > :15:34.university. They're not burdened with student debt. What about them?
:15:34. > :15:38.Do you think London can provide, and what sort of jobs would you
:15:38. > :15:40.like it to provide for them? Well, I think, I mean, this is really the
:15:40. > :15:42.nub of the question for many politicians across different
:15:42. > :15:45.political segments. It's pretty difficult. What we haven't been
:15:45. > :15:49.able to clearly create is the sort of jobs where, you know, people
:15:49. > :15:52.across the spectrum can come in to them. And it's a really very tough
:15:52. > :15:55.question. London will never become a manufacturing centre. No. As it
:15:55. > :15:58.was. I remember, I mean, the reason you have so many West Indians
:15:58. > :16:00.living in places like Brent and Hackney is cos those were once
:16:00. > :16:05.centres of manufacturing light engineering. But we could invest
:16:06. > :16:10.and produce green jobs. We could put money into house building and
:16:10. > :16:16.that creates jobs which many young Londoners could do. And we could
:16:16. > :16:19.also invest in the public sector and that produces jobs. There is no
:16:19. > :16:22.reason why London should have very rich people like Nicola, who I love,
:16:22. > :16:24.and then people on benefit. They've got to have jobs for ordinary
:16:24. > :16:29.Londoners and their children. the middle you're concerned about.
:16:29. > :16:32.It's the middle. Owen Jones. It's exactly that point. What happened
:16:32. > :16:35.in the 80s and the 90s were these middle income skilled jobs were
:16:35. > :16:38.sucked out of the economy, both under the Tories and New Labour.
:16:38. > :16:41.Now what we've seen in Germany, they've got an industrial strategy.
:16:41. > :16:44.So they caught the high tech boom and then they caught the renewable
:16:44. > :16:46.energy boom. We're not talking about going back to a 1950s factory
:16:46. > :16:49.skyline. We're talking about creating green collar, skilled jobs.
:16:49. > :16:52.In London? Absolutely. Absolutely in London. By building houses, but
:16:52. > :17:01.green collar jobs which give those sorts of men and women, skilled,
:17:01. > :17:03.secure employment which is well paid. Jane Ellison and Patrick.
:17:03. > :17:06.Well, I do actually have a very successful manufacturing company in
:17:06. > :17:09.my constituency which is surprising in a place like Battersea. But
:17:09. > :17:12.where they've been successful is they're very high tech. They're
:17:12. > :17:16.exporting all over the world. I mean, they're exporting technology
:17:16. > :17:19.to the Far East which is fantastic. But I think it's very unlikely to
:17:19. > :17:23.get is industry that's very heavy on land use and all that sort of
:17:23. > :17:25.thing. This is quite a small site but very high tech. And I think
:17:25. > :17:29.there is potential there because being close to export markets,
:17:29. > :17:33.being close to the City, dare I say, and all of that, the international
:17:33. > :17:36.aspect of London is actually good for this sort of company. I mean,
:17:36. > :17:38.when we talk about manufacturing we've kind of got to understand
:17:39. > :17:41.what's happening in the bigger picture. Back in New Zealand, I
:17:42. > :17:44.worked for a Labour government as an advisor to a front bench
:17:45. > :17:48.Minister and we had a lot of problems. Similar problems with our
:17:48. > :17:50.manufacturing sector in the sense that we were losing a lot of jobs
:17:50. > :17:53.there, because what's happening with manufacturing over the last
:17:53. > :17:55.couple of decades is that when transports become cheaper and it's
:17:55. > :17:58.been easier to communicate with suppliers overseas, the supply
:17:58. > :18:02.lines have been broken up. So manufacturing plants don't have
:18:02. > :18:05.to... You don't build the entire car in a manufacturing plant any
:18:05. > :18:08.more. You just build a part of it. So manufacturing has fundamentally
:18:08. > :18:10.changed and we actually have to have a different type of
:18:10. > :18:13.manufacturing if we're going to have manufacturing in London.
:18:13. > :18:16.look at Germany, they kept their manufacturing base far better than
:18:16. > :18:19.we have. And, actually, if you look at our youth unemployment rate,
:18:19. > :18:21.it's hurtling towards a quarter. In Germany it's 9%. They've got
:18:21. > :18:24.apprenticeships, supported by the employers. They've gone for two
:18:24. > :18:33.years, which actually give these middle income secure, skilled jobs
:18:33. > :18:36.to young people like that. Mike Tuffrey, you're a Lib Dem member of
:18:36. > :18:39.the Greater London Authority. You're a Lib Dem on the London
:18:39. > :18:42.Assembly. Absolutely. And we've got 400,000 people unemployed now and
:18:42. > :18:44.that number is rising. You're right, the economy has been hollowing out,
:18:45. > :18:47.so there are these top level financial services jobs. And there
:18:48. > :18:51.are lots and lots of low paying, very flexible temporary work. And
:18:51. > :18:53.the question is, in the middle. And I agree with those who are saying
:18:54. > :18:57.light industrial, processed, food processing, waste. Why are we still
:18:57. > :19:00.sending our waste and burying it in Essex? Why isn't that being re-
:19:00. > :19:03.processed? Where are you going to put it in London for goodness sake?
:19:03. > :19:06.No, you reprocess it and re-use it and there are already plastic
:19:06. > :19:09.recycling in Dagenham. We should have more of those. We need to
:19:09. > :19:19.change our wastes policies. We can create good jobs for people in the
:19:19. > :19:24.
:19:24. > :19:28.middle if we plan to do so. We need to have a multiplier effect of the
:19:28. > :19:32.local economy but not centralised. We have moved to a city to the
:19:32. > :19:36.Docklands. We can move Potter financial-services and tertiary
:19:36. > :19:41.sector industries to different areas of London which have a knock-
:19:41. > :19:49.on effect on local businesses as a result of it, and how much better
:19:49. > :19:54.distribution of wealth, accordingly. A gentleman over here. You showed a
:19:54. > :20:01.clip about the youngsters in Dagenham. I just happen to be from
:20:01. > :20:05.the automotive industry. Manufacturers really realise growth
:20:05. > :20:11.is in the services sector. think there's more jobs in
:20:11. > :20:15.mechanics than the workshops? Absolutely. In the after-sales and
:20:15. > :20:21.the service sectors where there have been body shops, mechanics,
:20:21. > :20:31.stimulate growth, bring the youngsters in for apprenticeships
:20:31. > :20:38.
:20:38. > :20:45.programmes and get them to Buddy up and use the. I want to bring John
:20:45. > :20:53.Burton in here. We have a missed opportunity with a larger and
:20:53. > :20:56.unemployed youths we have in this country and the lack of housing.
:20:56. > :21:03.And all these private companies profiteering off public money. Why
:21:03. > :21:13.is that happening? Because the politicians are being backed by
:21:13. > :21:13.
:21:13. > :21:18.them. Construction is the point I was making. We have got some
:21:18. > :21:27.fantastic infrastructure projects, all of them public and private
:21:27. > :21:31.funded. We had got our stations being rebuilt. London will create
:21:31. > :21:41.an enormous human capital of expertise in the skilled
:21:41. > :21:45.engineering jobs. The building houses, too. Your government has
:21:45. > :21:48.decimated the social housing budget. Well, that's not true but let's
:21:48. > :21:58.look at the construction sector. Let's look at the construction
:21:58. > :22:00.sector. They are rich with apprenticeships. Many of those
:22:00. > :22:02.public sector contracts go with conditions of employing
:22:02. > :22:06.apprenticeships. In theory, something like the Olympics should
:22:06. > :22:09.have brought thousands of jobs to Hackney. But in practice, what we
:22:09. > :22:13.found was that people in those adjoining boroughs got very few
:22:14. > :22:20.jobs. But Diane, we're talking about the future, so let's learn
:22:20. > :22:23.that lesson and get it right in the future. Yeah, but let's learn the
:22:23. > :22:28.lesson because it's one thing that's going to be a big
:22:28. > :22:31.infrastructure project. It's another thing for guys like those
:22:31. > :22:34.guys you saw in the film. Engineering jobs. These are good
:22:34. > :22:37.skilled jobs. They're equivalent to the kind of things they were
:22:37. > :22:41.talking about. Don't talk it down. London will be the expert at some
:22:41. > :22:45.of these skills over the next 10-15 years. Shiv Malik. You know, you go
:22:45. > :22:48.to work and then you go home and if your disposable income at the end
:22:48. > :22:51.of that, because your housing costs are very expensive is so low, then
:22:51. > :22:54.suddenly the work doesn't look so attractive. That's one aspect of it.
:22:54. > :22:58.So it's a whole economy. But the other aspect is we haven't actually
:22:58. > :23:02.asked well, what kind of work do we really want, you know young people
:23:02. > :23:09.to be doing. What kind of work do we want to see in this country?
:23:10. > :23:13.There's something a bit more fundamental about that. Right. We
:23:14. > :23:17.need to move on. We need to move on folks, I'm sorry. We've got a lot
:23:17. > :23:20.to get through in this programme. But it doesn't have to be factories
:23:20. > :23:23.or finance. Can we get growth from other new businesses and sectors?
:23:23. > :23:29.The capital is always reinventing itself and you don't have to go far
:23:29. > :23:34.from here to see young Londoners, striving to find the next big thing.
:23:34. > :23:40.It's a hugely exciting time. We set up a company as a care working
:23:40. > :23:44.office space. To fund start-ups. They are early stage are just
:23:44. > :23:50.getting off the ground, anything enabled by technology and mostly
:23:50. > :23:55.related to the internet. The potential of what the companies are
:23:55. > :24:00.building is enormous. It creates some jobs. It's not the same as the
:24:00. > :24:04.Toyota a but the growth rate in two years and hiring people from
:24:04. > :24:08.different backgrounds is significant. A lot of investment is
:24:08. > :24:18.coming into this area as well. There's going to be a tax revenue
:24:18. > :24:19.
:24:19. > :24:22.and incentives for young people to get involved in the job market. The
:24:22. > :24:27.impact of Facebook on the US economy with its value estimated to
:24:27. > :24:37.be $100 billion, there is no reason why we can't build a business is
:24:37. > :24:39.
:24:39. > :24:42.more successfully here in London. Right. Eileen Burbidge, a lovely,
:24:42. > :24:45.up-beat, positive video. I'm sure we'd all love to have Facebook in
:24:45. > :24:49.London, probably employs five people. But it would be great to
:24:49. > :24:53.have in London, wouldn't it? What do we do? I don't think anyone is
:24:53. > :24:58.going to disagree we want more of that. What do we need to do to get
:24:58. > :25:01.more of it? I think we need to encourage young people and she was
:25:01. > :25:04.talking about this as well, to sort of use their skills and what
:25:04. > :25:07.they're using actually day to day and realize that they can actually
:25:07. > :25:12.start finding jobs and employment that actually leverage those kinds
:25:12. > :25:15.of skills and those interests. lot of what London has done in the
:25:15. > :25:19.past is attract entrepreneurs here, they come here to set up a business.
:25:19. > :25:22.Are we still an attractive place. Can we be a more attractive place.
:25:22. > :25:25.Are we in danger of throwing it away by 50p tax rates and talking
:25:25. > :25:28.about business in the ways we do. London is still hugely attractive
:25:28. > :25:31.and I think that's something that's been brilliantly leveraged actually
:25:31. > :25:33.over the last couple of years and what's happening with the Olympics
:25:33. > :25:36.and also the government sort of putting new attention on what's
:25:36. > :25:39.happening in East London, all the way out to Statford with the
:25:39. > :25:42.Olympic City and everything they're sort of terming Tech City or which
:25:42. > :25:45.used to be known as Silicon Roundabout. It's multicultural.
:25:45. > :25:48.There's great talent to hire from. It's very attractive to hire people
:25:48. > :25:51.from the continent, from America, from North America. So you can get
:25:51. > :25:54.a great sort of diversity of talent to address global opportunities and
:25:54. > :26:00.create global businesses online. Does anybody think it's a good idea
:26:00. > :26:07.to add new set-up. But does anybody call them here who calls himself an
:26:07. > :26:15.entrepreneur? The gentleman at the back. I have a chain of opticians.
:26:15. > :26:18.I and the retail face. I'm with staff who are struggling day to day
:26:18. > :26:21.and we talk about, yes, entrepreneurship, stuff like that.
:26:21. > :26:24.We can be wishy washy. We need services, we need retail business
:26:24. > :26:27.and yes, we need the ability to start up. I'm very much for
:26:27. > :26:30.financial services. It's important. But the banks in Britain are so
:26:30. > :26:33.conservative in their thinking of venture capital. That's why people
:26:33. > :26:37.go to other countries like the States something like that as well.
:26:37. > :26:40.And that is what we need. We need more help in terms of finance, all
:26:40. > :26:44.the way through. I think we're back to the banks. I think I need to
:26:44. > :26:47.call on Nicola Horlick to give us a quick comment on that. I think it's
:26:47. > :26:51.true of banks all, all over the world, you don't generally, when
:26:51. > :26:54.you start up a business get money from a bank. And, in fact actually,
:26:54. > :26:57.if you look at how a lot of people start their businesses, they often
:26:57. > :27:00.borrow money on credit cards, which is terrible, but that's how it is.
:27:00. > :27:03.And I think the important thing is to encourage individuals which you
:27:03. > :27:06.can do through the tax system, to invest in businesses. And the
:27:06. > :27:09.government actually has been doing that by increasing the benefits
:27:09. > :27:12.that high rate tax payers can get for investing in new businesses. So
:27:12. > :27:15.I'm really hoping that over the next few months we're going to see
:27:15. > :27:20.the benefits of that with more, higher, net worth individuals
:27:20. > :27:23.investing in new businesses. Because that's exactly what banks
:27:23. > :27:31.are supposed to do. They're given a licence to basically give money to
:27:31. > :27:34.businesses and if they're not doing that, what's their utility?
:27:34. > :27:38.what does a bank do? A bank takes deposits from people who have cash,
:27:38. > :27:41.who tend to be older people and it then lends. To who? It's got to
:27:41. > :27:47.measure the risk. I'm not a banker, but that's what banks do. So the
:27:48. > :27:50.point is, if they take huge risks... They don't actually do that.
:27:50. > :27:53.They're more likely to lose the money. In an advanced capitalist
:27:53. > :28:03.economy, they create credit. No, look... This is the licence that
:28:03. > :28:06.
:28:06. > :28:16.they have. Look, new businesses We do not want companies to have a
:28:16. > :28:19.
:28:19. > :28:23.Based on the fact they are talking about small businesses, and
:28:23. > :28:28.thinking about the youths, so many of them are out of work. You go to
:28:28. > :28:33.uni, you have a degree and a Masters and you come out of
:28:33. > :28:37.university and he did not have a job. At the end of the day, the
:28:37. > :28:42.banks are not helping the young people, even if you do not get
:28:42. > :28:46.employed, at least you should be able to go to banks and get me to
:28:46. > :28:50.start your own business. We have been talking about lending to small
:28:50. > :28:57.businesses, we have to understand what got us into this mess and part
:28:57. > :29:02.of that was very loose lending. But we also have to understand the
:29:02. > :29:06.serious problem this country house with debt. And in particular, we
:29:06. > :29:11.have to understand that these cuts, which everyone will agree are quite
:29:11. > :29:17.hard, we have to do because we are spending so much money on servicing
:29:17. > :29:21.our debt every week, that there is a real risk to the economy here.
:29:21. > :29:25.You are contradicting yourself. am going to move on.
:29:25. > :29:31.We have talked about the city, the finance is, the entrepreneurs, we
:29:31. > :29:36.have talked about the need for jobs. Let's talk about those who are more
:29:36. > :29:41.socially excluded. We have an amazing economy but it has pockets
:29:41. > :29:46.of real deprivation -- deprivation with poverty too much for the rest
:29:46. > :29:50.of the country. How do we re-engage with folks who have lost touch with
:29:51. > :29:57.the labour market and risk becoming alienated. Here is one scheme which
:29:57. > :30:00.is helping young people find a fulfilling role.
:30:00. > :30:06.We are there exterminators and we are a group of young people running
:30:07. > :30:11.a business together. We have been set up by the Active Change
:30:11. > :30:15.Foundation. We are a pest control company. It is young people now
:30:15. > :30:20.have been in the youth centre who have been up to no good on the
:30:20. > :30:25.streets. It is going to be really a life changed. It is really hard to
:30:25. > :30:33.look for a job at the moment. ended up getting involved in a gang
:30:33. > :30:38.and saw a lot of things I did not want to see. It is hard, very hard.
:30:39. > :30:43.This is our launch celebration to say yes, we are here now, can you
:30:43. > :30:47.see us? We are trained and qualified. I believe this is my
:30:47. > :30:52.only way out to change my life around. This is a huge life changed
:30:52. > :30:55.five number of us here. It is giving us the stepping-stone.
:30:55. > :30:59.Exterminated as it is a great example of what can be achieved
:30:59. > :31:04.when people sit down and talk about opportunities they can give to
:31:04. > :31:09.young people. The rat catchers of Waltham Forest,
:31:09. > :31:14.the exterminators. We have a couple of them here. Assad, tell us what
:31:14. > :31:20.you think you would be doing it you had not been given help to create
:31:20. > :31:28.this business? I would be doing what I do to make my money,
:31:28. > :31:32.basically. It would not be legally. There are many ways to make money.
:31:32. > :31:38.It is all about money, I will be honest with you. I would do
:31:38. > :31:46.whatever it takes to get that money. Assad, you have this in common with
:31:46. > :31:51.Nicola, it is all about the money. Hanif Qadir, you run the Active
:31:51. > :31:58.Change Foundation. The key word is active. You put a lot of effort
:31:58. > :32:02.into creating a project like this. It helps a few youngsters.
:32:02. > :32:07.Absolutely. It goes back to that gentleman who said you have to find
:32:07. > :32:14.individuals Andy have to inspire people to bring them down to the
:32:14. > :32:21.grassroots level. Is it is a lot of work, it is very expensive, can you
:32:21. > :32:26.help everybody on the estate? not big money, it is more money but
:32:26. > :32:31.it is with an initiative. A bit of hard work. It takes a bit of hard
:32:31. > :32:36.work to work with the young people. Look at the gaps. It is about
:32:36. > :32:41.filling the gaps in the market. do we feel about putting in
:32:41. > :32:45.resources to help younger Londoners who are deprived. Patrick Nolan,
:32:45. > :32:49.you tend to be sceptical about schemes? The important thing to
:32:49. > :32:55.understand is it is not just the government's job. The discussion
:32:55. > :32:59.before told about what the government should do and the
:32:59. > :33:05.assumption that they should spend more. It is not just that the
:33:05. > :33:07.government. It is a families and it is about communities and it is
:33:07. > :33:11.everyone saying of the right thing and for example, teaching their
:33:11. > :33:19.children to be more financially literate, to understand how they
:33:19. > :33:24.need to work at school. If you look at the UK... I understand what you
:33:24. > :33:27.say but in reality it is different at the grassroots level. Some
:33:27. > :33:31.people have not got a chance in life and some people have not got a
:33:31. > :33:35.family background to give them support. That is reality. The
:33:35. > :33:39.majority of young people in this country who are socially excluded
:33:39. > :33:44.do not have that support mechanism. The government is not going to help
:33:44. > :33:50.with that, we have learnt that. you get government funding? We get
:33:50. > :33:54.funding to prevent gang crime and extremism. We can stop them from
:33:54. > :34:00.being criminals and extremists but what are we going to do with them?
:34:00. > :34:06.This is an initiative. We put money together, 10 ground, that is all it
:34:06. > :34:10.cost to give six people a chance in life. -- 10 grand. We have not told
:34:10. > :34:14.about what employers can do to help small businesses or the sort of
:34:14. > :34:17.social problems. It is not just a question of what the government
:34:17. > :34:22.should do. Too often we say it is just a problem for the government.
:34:22. > :34:27.I have not said anything about the government. They are not equipped
:34:27. > :34:34.for this problem. Bottom line. few thoughts from the audience
:34:34. > :34:38.about how much help should be given to people from the States.
:34:38. > :34:42.gentleman over there said it is not about the government. It is about
:34:42. > :34:46.the government. When the government are making women work longer hours
:34:46. > :34:50.so they are not there to help look after their children, that is the
:34:50. > :34:55.government's job to ensure they are looking after women and providing
:34:55. > :35:00.back-up for mothers and have enough time to be there with their kids.
:35:00. > :35:04.They are also pursuing low income families on to the outskirts, so
:35:04. > :35:08.they are removing them from the Prime area to the outskirts where
:35:08. > :35:12.there are no jobs. You are causing more problems for the other kids
:35:12. > :35:17.who are surrounded by other people who are not doing anything or
:35:17. > :35:22.providing them with any sort of influences apart from crime. So it
:35:22. > :35:28.is the government's job, OK, that is why you are then power to do
:35:28. > :35:35.your job, OK? These people, people have to take more responsibility
:35:35. > :35:41.for themselves. Let me give you one example. You have to take
:35:41. > :35:44.responsibility. Let's let Patrick finish. We are talking about all
:35:44. > :35:50.these problems and another one is financial literacy and people
:35:50. > :35:55.getting into high levels of debt and pay-day loans. The second most
:35:55. > :36:00.taboo family -- to be subject in families is finance. If people are
:36:00. > :36:05.not willing to talk about these things then they need to look at
:36:05. > :36:10.themselves. They need to start taking more responsibility. On the
:36:10. > :36:14.social excluded, micro initiatives like those are fine. But in the end,
:36:14. > :36:19.you cannot create jobs out of thin air and government has a role in
:36:19. > :36:23.putting money in people's pockets, in creating the general conditions
:36:24. > :36:28.where small service industry can thrive and for government to walk
:36:28. > :36:35.away and say, people are not financially literate, that is very,
:36:35. > :36:40.very unfair. I'm not having a go at you, I make a point about the
:36:40. > :36:47.government's role. I would like a few more comments from the audience.
:36:47. > :36:51.The 20 cent of Londoners in -- 20 % of young people do not have an O
:36:51. > :36:55.level. The system has let them down. There are enterprises out there,
:36:55. > :37:00.socially concerned entrepreneurs who are prepared to create jobs. I
:37:00. > :37:03.have done this for years. Created jobs for people you are not
:37:03. > :37:08.qualified very well, who are inarticulate who are not able to
:37:08. > :37:13.get a job. There are lots of us. We need assistance from procurement
:37:13. > :37:20.agencies, local councils, to buy services locally, not from big
:37:20. > :37:24.highly capitalised companies. have had quite a journey, ladies
:37:24. > :37:31.and gentlemen. We have talked about the house, perhaps not and the
:37:31. > :37:36.people in the middle. Here is a last question for year. I'm
:37:36. > :37:40.interested in where the optimistic about the next 20 years. The city
:37:40. > :37:44.will progress and be more affluent and hope fully and possibly more
:37:44. > :37:49.equal. How many of you are optimistic about London over the
:37:49. > :37:55.next 20 years? How many would say you are pessimistic about London?
:37:55. > :37:59.You are split. I am not going to count hands because it is
:37:59. > :38:06.completely unscientific. It looks about 50-50. May be slightly more
:38:06. > :38:10.optimistic. Ladies and gentlemen, that is it. We have to draw to a