Ladies and Gentlemen,
I was delighted to have been invited to speak this evening.
I’d also like to thank Tony for those kind words of introduction.
When you look around today (3 September 2014) it is hard to believe just 35 years ago London was a city in decline.
The docks were closing.
Factory gates were shutting, unemployment was rising and the landscape of the inner city was dereliction and decay.
The last 3 decades have seen a transformation.
The return of ambition, optimism and a belief that London is one of the great global cities. Just last month Forbes magazine described London as the most influential city in the world.
We all want this great city to continue to be successful and we want London to be a powerful motor for the rest of UK’s economy.
I’m confident that is going to happen. And I’d like to take just a few moments this evening to explain why.
Long term economic plan
The signs are that the economy is recovering from the deepest recession in peacetime history.
According to the International Monetary Fund, the UK is now the fastest growing country in the G7. Thanks to you and the efforts of entrepreneurs and business leaders like you there are more than 1 million new jobs in the private sector.
We’ve just seen the biggest fall in youth unemployment since records began and we are on course to cut in half the record deficit we inherited.
But I know there is still more to do.
In an increasingly globalised world, when companies are deciding where to invest and talented people are choosing where to live or start a business, we need to make London and the UK as attractive as possible.
First, that means creating a competitive business environment. That’s why, for example, we are cutting corporation tax to the lowest in the G20 from April next year.
And because you need regular, affordable and reliable transport options, the second thing we are doing is investing to improve our essential transport infrastructure.
That takes me to the title of this evening’s event – keeping London moving.
Alexis de Tocquville once wrote that:
History is a gallery of pictures in which there are few originals and many copies.
And our Victorian forbearers faced the same problem we do today.
London was growing fast.
Keeping the city moving was becoming increasingly difficult.
It could take an hour and a half to travel just five miles from Paddington station to the Bank.
As a result, drastic steps to cut congestion were under consideration.
In 1846 Richard Kelsey, Surveyor of Pavement to the City of London, even asked the Royal Commission on the railway that, given the congestion on the streets, whether it was still in the public interest for people to use their own carriages instead of taking the omnibus.
In 1852 Parliament considered a proposal to build a railway viaduct across the Thames reaching from London Bridge to Westminster.
In the end, the solution was as bold as it was ambitious.
They built the world’s first underground railway.
But for too long, this country forgot the lessons the Victorians taught us.
We simply didn’t invest enough in our infrastructure.
In fact, infrastructure investment was lower than in 1998 in every year until 2011. So it’s no surprise that by 2011 nearly half of the respondents to a CBI survey said the UK’s transport network was well below average.
Investing now and for the future
Today, London’s population is growing once again and I am determined that we learn the lesson of history.
That we make the investment that’s needed to keep London moving.
For example, right now, around 25 meters below our feet, engineers are hard at work. They are building two platforms, around two and half football pitches long, that will form the new Bond Street Crossrail station.
On current plans, Crossrail will increase the capacity of London’s rail network by 10%. And we are looking at options to extend it further into Hertfordshire.
But Crossrail is just one of the improvements we are making to London essential transport infrastructure.
We are also in the process of upgrading Thameslink which, when complete, will see up to 24 trains an hour running through the heart of the city.
From autumn next year the weekends will see a night tube service, helping to grow London’s night time economy
Looking to the future, we believe that Crossrail 2 could play a major part in meeting the growth in demand. We are investing £2 million towards a feasibility study into options for Crossrail 2 and I will renew the safeguarding directions for the route before next Spring.
I know the Mayor has recently published his vision for London’s transport network in 2050, including extending the Bakerloo line into south-east London. We’ve backed TfL with over £10 billion during this Parliament and access to a further £10 billion between 2015 and 2021 and we will work closely with the Mayor and Transport for London to ensure London has the transport network it needs to grow.
To compete in the future, as well as keeping Londoners moving, we will also need to deepen our links with the fastest growing regions of the world.
Air travel will play an important part.
So far, London’s airports have been great successes. But the truth is, Heathrow is now effectively full and Gatwick is nearing capacity. Failing to address that capacity crunch could cost the economy up to £45 billion.
That’s why we established the Airports Commission to take a fresh look at the UK’s future needs.
And as far as possible, to make progress, we want to see a consensus around the solution.
The quality of the Commission’s analysis will help that happen and I’d like to take this opportunity thank the LCCI’s members for your contribution to the Commission’s thinking so far.
High Speed 2
You might not believe this, but as I travel the country, I’m sometimes told that London receives more than its fair share of investment.
I respectfully disagree.
McKinsey estimate that, by 2025, London will be one of the four largest city economies in the world.
For that to happen, we need to keep London moving.
But I also want to see growth right across the country.
That’s not going to happen by making London and the south-east worse off.
The truth is that businesses locate in London to be close to their largest market and near their competitors.
But the result is some of the most expensive commercial and residential property in the world.
While at the same time great cities like Sheffield, Manchester and Birmingham want to attract investment.
So, as well as deepening London’s links with the fast growing countries of the world, we also need better links between the capital and our other great cities.
That’s why, in just three years time, we will start building High Speed 2.
The first new north-south railway line for generations.
It will release the capacity we need on the West Coast mainline to run far more services to fast growing towns like Milton Keynes.
But it will do much more than that. I mentioned at the start that over the past 3 decades London has been revitalised. Nowhere is that more true than the area surrounding King’s Cross station.
Just a few years ago, it was the kind of place you wouldn’t risk going after dark. Now people gather in the largest new public space in London, up to 2,000 new homes and 45,000 people live, work and study in the area.
The catalyst for that transformation was High Speed One.
There’s the opportunity for the same thing to happen to Euston and at Old Oak Common.
The Mayor and boroughs have stated their plans Old Oak Common to create 90,000 new jobs and up to 19,000 new homes.
We’ll be setting out a similarly bold ambition for Euston’s redevelopment in just a few months time and similar bold transformations are planned for Manchester, Birmingham, Sheffield and Leeds.
Over two decades, HS2 will cost about £2 billion a year. That’s the same as we are spending on Crossrail.
And like Crossrail, I am determined that it will be delivered on time and on budget.
To sum up, we have a long term economic plan to help you grow your business and to grow the economy, by cutting taxes and improving our infrastructure.
We are upgrading the tube, building Crossrail, making a record investment in our roads and railway and ensuring we have the airport capacity the country needs.
Taken together, these will keep London, and the country, moving and growing.
Thank you for listening.