For London to live up to its promise, employers need to recruit from outside their comfort zone

A teenager opens her A-level results. Image: Getty.

The last year of running for mayor of London has been an amazing and humbling experience. I extend my warmest congratulations to the Conservative candidates who made the shortlist; Zac, Syed, Stephen and Andrew have all worked incredibly hard for the Conservative Party over the years, and are dedicated public servants.

With over 31,000 registered supporters behind me, I’ve come up with a policy list bursting with innovative ideas, and held many dozens of meetings with charities, developers, tech start ups and apprenticeship providers. Now the time has come to really push for a London that is more open, entrepreneurial, inclusive, and, most importantly, socially mobile.

This is the driving force behind the launch of Equal.London: a platform from which we can project this initiative of social change.

My way out of humble beginnings was through entrepreneurship. It was a way of becoming successful without needing an array of top qualifications, or the “polish” and well-travelled CV of my contemporaries. There were zero barriers to entry: I was able to find my way in London, because it was full of opportunity for people with a passion for disruptive ideas that could change the world for the better.


But we cannot build a socially mobile society simply on the backs of budding entrepreneurs and small business owners. If this aspirational society that we all like to talk about is to be a reality for everyone, we must do more to break the glass ceiling to senior positions in top institutions.

The Social Mobility and Child Poverty Commission’s recent research has exposed a big problem in our professions. While only 7 per cent of the population went to a private school, a quite staggering number of people in top positions in society did: 54 per cent of FTSE 100 CEOs, 71 per cent of senior judges, 62 per cent of senior armed forces officers, 55 per cent of top civil servants, 53 per cent of senior diplomats and 43 per cent of newspaper columnists.

The reasons for this are multifaceted. Many private schools are in a league of their own when it comes to both attainment and the extracurricular activities that they provide: these things do a great deal to build the character of pupils. It’s also true that, while abolishing the 11+ prevented people being condemned to failure at an early age, one of the consequences was that stagnating attainment in comprehensive schools wasn’t properly addressed until the Gove reforms – and in the meantime social mobility has actually gone backwards.  

There are, however, many other factors that have contributed to this growing elitism – and employers themselves must bear some responsibility. Focusing recruitment efforts predominantly on a narrow pool of Russell Group universities, as many top firms do, has its consequences. Who knew, for example, that the Prime Minister, the head of the Downing Street Policy Unit, the chief whip, the chairman of the Conservative party and the rail minister all went to one specific Oxford College, Brasenose? It’s unhealthy for so many powerful people to be drawn from such a narrow pool.

Labour productivity is so low partly because the people most appropriate for certain roles aren’t moving to London: the increase in their housing costs means it simply isn’t worth their while.

While official or unofficial assessment criteria (“polish”) continue to shut out those who would otherwise be well-suited to top roles in our big institutions, it is even worse in organisations that don’t have formal assessments or aptitude tests as part of the interview process. That only increases the power of contacts and nepotism. The same applies to informal internships: the old-boys network is alive and well as soon as you stray away from the Times’ Top 100 employers.

As a businessman and entrepreneur, I know people just want the best for their business. They are simply trying to do a good deed and help out by providing opportunities for their friends’ children. But the system it creates is one of a closed shop; we need to work with businesses to broaden the talent pool and broaden exposure for those less well off.

Another prominent issue is that many of these internships are unpaid. That means that only those who can afford to commute into the capital, or are lucky enough to live with their parents there, can viably do them. This feeds through into jobs in later in life: those who’ve managed to get the experience have far more polished CVs than their less privileged counterparts.

Unless the government and top recruiters tackle these challenges, we will continue to fail generations of young people who want to aim for a standard of living higher than that of their parents.

Part of the solution lies in resolving the housing crisis. Labour productivity is so low partly because the people most appropriate for certain roles aren’t moving to London: the increase in their housing costs means it simply isn’t worth their while.

This is why speeding up the planning process and allowing congruous extensions of properties (along with other reforms announced in the government’s Fixing the Foundations report) is so important. Boosting housing supply will go a long way to encourage social mobility, as well as securing economic growth and lowering living costs.

But I also want the government to launch a review into unpaid internships. It should also attach clear conditions to companies recouping the money they pay through the apprenticeship levy, guaranteeing that recruitment for all their positions is truly fair.

This is the promise of London – to be a beacon both for human rights and for greater opportunities for all. While London is going through unprecedented expansion and success, it will become increasingly difficult to sustain this if opportunity isn’t spread throughout the capital.

The two worlds of Canary Wharf and the borough of Tower Hamlets that surrounds it embody the challenge in this area. How can we foster links between the city and its citizens and boost accessibility? The answers lie both in education, and in employers going out of their comfort zone and widening their search for future talent.

With the launch of Equal.London, I make this my mission for the foreseeable future – to keep making the case for attracting talent wherever it comes from, or however unpolished it is. The world of entrepreneurship understand this. It’s time that the establishment did too – for the sake of London’s, and Britain’s, future.

Ivan Massow is a gay rights campaigner and financial services entrepreneur, and a former candidate for the Conservative Party’s nomination to be the next mayor of London.

 
 
 
 

“Stop worrying about hairdressers”: The UK government has misdiagnosed its productivity problem

We’re going as fast as we can, here. Image: Getty.

Gonna level with you here, I have mixed feelings about this one. On the one hand, I’m a huge fan of schadenfreude, so learning that it the government has messed up in a previously unsuspected way gives me this sort of warm glow inside. On the other hand, the way it’s been screwing up is probably making the country poorer, and exacerbating the north south divide. So, mixed reviews really.

Here’s the story. This week the Centre for Cities (CfC) published a major report on Britain’s productivity problem. For the last 200 years, ever since the industrial revolution, this country has got steadily richer. Since the financial crash, though, that seems to have stopped.

The standard narrative on this has it that the problem lies in the ‘long tail’ of unproductive businesses – that is, those that produce less value per hour. Get those guys humming, the thinking goes, and the productivity problem is sorted.

But the CfC’s new report says that this is exactly wrong. The wrong tail: Why Britain’s ‘long tail’ is not the cause of its productivity problems (excellent pun, there) delves into the data on productivity in different types of businesses and different cities, to demonstrate two big points.

The first is that the long tail is the wrong place to look for productivity gains. Many low productivity businesses are low productivity for a reason:

The ability of manufacturing to automate certain processes, or the development of ever more sophisticated computer software in information and communications have greatly increased the output that a worker produces in these industries. But while a fitness instructor may use a smartphone today in place of a ghetto blaster in 1990, he or she can still only instruct one class at a time. And a waiter or waitress can only serve so many tables. Of course, improvements such as the introduction of handheld electronic devices allow orders to be sent to the kitchen more efficiently, will bring benefits, but this improvements won’t radically increase the output of the waiter.

I’d add to that: there is only so fast that people want to eat. There’s a physical limit on the number of diners any restaurant can actually feed.

At any rate, the result of this is that it’s stupid to expect local service businesses to make step changes in productivity. If we actually want to improve productivity we should focus on those which are exporting services to a bigger market.  There are fewer of these, but the potential gains are much bigger. Here’s a chart:

The y-axis reflects number of businesses at different productivities, shown on the x-axis. So bigger numbers on the left are bad; bigger numbers on the right are good. 

The question of which exporting businesses are struggling to expand productivity is what leads to the report’s second insight:

Specifically it is the underperformance of exporting businesses in cities outside of the Greater South East that causes not only divergences across the country in wages and standards of living, but also hampers national productivity. These cities in particular should be of greatest concern to policy makers attempting to improve UK productivity overall.

In other words, it turned out, again, to the north-south divide that did it. I’m shocked. Are you shocked? This is my shocked face.

The best way to demonstrate this shocking insight is with some more graphs. This first one shows the distribution of productivity in local services business in four different types of place: cities in the south east (GSE) in light green, cities in the rest of the country (RoGB) in dark green, non-urban areas in the south east in purple, non-urban areas everywhere else in turquoise.

The four lines are fairly consistent. The light green, representing south eastern cities has a lower peak on the left, meaning slightly fewer low productivity businesses, but is slightly higher on the right, meaning slightly more high productivity businesses. In other words, local services businesses in the south eastern cities are more productive than those elsewhere – but the gap is pretty narrow. 

Now check out the same graph for exporting businesses:

The differences are much more pronounced. Areas outside those south eastern cities have many more lower productivity businesses (the peaks on the left) and significantly fewer high productivity ones (the lower numbers on the right).

In fact, outside the south east, cities are actually less productive than non-urban areas. This is really not what you’d expect to see, and no a good sign for the health of the economy:

The report also uses a few specific examples to illustrate this point. Compare Reading, one of Britain’s richest medium sized cities, with Hull, one of its poorest:

Or, looking to bigger cities, here’s Bristol and Sheffield:

In both cases, the poorer northern cities are clearly lacking in high-value exporting businesses. This is a problem because these don’t just provide well-paying jobs now: they’re also the ones that have the potential to make productivity gains that can lead to even better jobs. The report concludes:

This is a major cause for concern for the national economy – the underperformance of these cities goes a long way to explain both why the rest of Britain lags behind the Greater South East and why it performs poorly on a

European level. To illustrate the impact, if all cities were as productive as those in the Greater South East, the British economy would be 15 per cent more productive and £225bn larger. This is equivalent to Britain being home to four extra city economies the size of Birmingham.

In other words, the lesson here is: stop worrying about the productivity of hairdressers. Start worrying about the productivity of Hull.


You can read the Centre for Cities’ full report here.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites

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