London has turned its back on the very people it needs most

The most famous owner of a new Victorian terrace house in upper Holloway was Mr Pooter, and the whole point about Mr Pooter was that he was a bit pretentious, given his job, which was to work as a lowly sort of clerk. He ranked well below the Milibands on the socio-economic scale; and yet he was a part of the service industries — banking, insurance, accountancy, law — that made London the richest and most powerful commercial capital on earth.

These days the economy of London is still utterly dependent on such service industry personnel, middle managers far more energetic and successful than Pooter. They are key workers of the city, though they don’t work in the public sector. We are talking about the senior PAs, the personnel managers, the IT specialists, you name it. In the next 10 years, the number of jobs in London’s service industries is set to double, and yet for too many of these hard-working middle-income people, the chances of living in a home like Ed Miliband’s are virtually nil. It’s good to know that they can still rely on

Ed is not so much on the top of a ladder. For vast numbers of people, the ladder has been kicked away. He is on the top of a cliff, and beneath him are growing numbers of families who have absolutely no hope of scaling it. It is not enough to say we need to build more housing, though we certainly do, and we will.

We also need to think how to target this group — the struggling middle — that is currently not being helped, and that is so vital for the economy. At present, we are building new homes for two broad groups of people. Of the roughly 30,000 homes that were built in London last year, a huge chunk were “affordable homes” of one kind or another, and then there was another sizeable chunk of top-end stuff – swish houses and apartments, often for foreign buyers.

We are not doing as the Victorians did, and providing new stock to be bought by the people in the middle – on household incomes from £30,000 to £64,000; and they are feeling utterly and understandably ignored. They cannot get the mortgages they would need, not at current prices, and not with lenders in their current mood. They have to live at a great distance from their place of work, and spend huge quantities on travel and hardly get to see their children in the evenings. They are obliged to rent at ever higher prices. In the past 10 years, the number of rented households in London has doubled, and rents went up 12 per cent last year alone.

The overwhelming majority of such people would like to buy, and to get on the same magic property escalator that has boosted the Milibands. It is time to help them. We in London have this month launched a “Housing Covenant”, an understanding between government and middle-income groups who work so hard, that we will put £100 million into building the good-quality homes that they need, and that they can buy.

Of course, Labour will object, and complain that every penny of subsidy should go to “affordable” homes for those, often on benefits, who cannot afford to buy at all. My answer is simple: this plan would help the very “squeezed middle” that Ed claims to espouse. We desperately need more housing not just for the poor, but for this vast and economically crucial group who are the motor of the London (and therefore of the UK) economy.

If we fail to cope with their needs, then the urban economics expert Prof Michael Ball has calculated that the resulting dislocation and inefficiency will cost us £35 billion in lost growth over 10 years. If we can make these investments in middle-income housing, we will boost the construction industry that provides so many jobs in itself, and we will enable the city to support the middle-income employees who drive the machine of the London economy that produces tax yields for everyone — and we will give them the same hope, the same trajectory, the same opportunity as the Milibands enjoy.