Sadiq Khan's London is crumbling. Reeves may have just sealed its fate

Telegraph

14 hours ago

Rachel Reeves knew the Conservatives would condemn her spending plans in the strongest terms they could conjure up. The same goes for the Liberal Democrats and Reform.
What she might not have expected was the strength of opposition from within her own party. Sir Sadiq Khan, the Mayor of London and one of Labour's most high-profile figures, issued perhaps the most cutting criticisms.
From crime to transport to housing, the newly knighted veteran of Left-wing politics laid into the Chancellor's schemes.
'This spending review could result in insufficient funding for the Met and fewer police officers. It's also disappointing that there is no commitment today from the Treasury to invest in the new infrastructure London needs,' Sir Sadiq said.
'Projects such as extending the Docklands Light Railway not only deliver economic growth across the country, but also tens of thousands of new affordable homes and jobs for Londoners. Unless the Government invests in infrastructure like this in our capital, we will not be able to build the numbers of new affordable homes Londoners need.'
The mayor's outburst comes amid signs the capital is crumbling, with crime surging. Without additional support, Reeves risks condemning the city to a future of decline – imperilling a Labour stronghold in the process.
Shoplifting jumped by more than 50pc in the capital last year according to police data, a far sharper increase than in any other region. Non-violent thefts such as pickpocketing were up by 41pc.
Mayfair, the haunt of the global rich, has attracted a reputation for high-value crime. Indian bosses, for instance, used a meeting last year with David Lammy, the then shadow foreign secretary, to complain about the threat of muggers seeking expensive watches, jewellery and phones.
Shopkeepers view the Metropolitan Police as the worst force for responding to crime, according to the British Retail Consortium. Its surveys found one in three Londoners witnessed shoplifting last year.
Crime has got so bad that Greggs has moved its drinks and sandwiches behind the counter in five stores, including in London's Whitechapel, Peckham and Ilford, blaming anti-social behaviour. It follows reports of a growing problem with thefts from the bakery chain.
'We've got youths who think it is perfectly acceptable to run through the streets with machetes, we've got people literally walking into shops and taking exactly what they want,' says Susan Hall, a member of the London Assembly and the Conservative candidate for the mayoralty last year.
'The whole social fabric is just disappearing. It is becoming more and more lawless,' she says, noting fare-dodging on public transport is at 'epidemic levels'.
The capital's decline is attracting increasing political attention. Robert Jenrick, the shadow justice secretary, filmed himself confronting fare-dodgers at London stations.
Neil O'Brien, a Conservative MP, posted photos of a train carriage covered floor to ceiling in graffiti, saying:
Mad what Khan has allowed to happen to the Bakerloo line - looks like 70s New York pic.twitter.com/t4bl5sWBCp
— Neil O'Brien (@NeilDotObrien) May 28, 2025
A guerrilla group of graffiti cleaners recently publicised their activities on social media, scrubbing despoiled Tube carriages in high-vis jackets bearing the slogan 'Doing what Sadiq Khant'.
Rough sleeping in London has doubled since 2021, more than erasing the improvement in the lockdown era. The boroughs of Westminster, Camden and the City of London top the rankings.
In the case of Westminster and the City of London, it makes for incongruous scenes of poverty alongside luxury, with homeless encampments opposite the Hilton Hotel on Park Lane. Doorways on famed thoroughfares including the Strand and the routes from Buckingham Palace to Parliament are used as shelters for the night.
Once-proud Oxford Street, centre of London's shopping district and an international tourist attraction, has declined amid the rise of American candy stores and tat merchants. Officials in Westminster have drawn up plans to revive it.
London's unemployment rate of 6.4pc is the highest in the nation, and the fastest-rising.
Despite the capital's problems – and the fact London has long been a bedrock of Labour support – Reeves and her colleagues show no signs of trying to make the problem any better.
For one thing, the Government is making it harder to take on workers. Higher staffing costs since April's National Insurance tax raid and a sharp increase in the minimum wage are squeezing already cash-strapped restaurants, bars and cafes. London institutions including The Gun in Homerton, Leroy in Shoreditch and Lyle's, which held a Michelin star for a decades, are among scores that have closed their doors in recent months.
It adds to fears for London's eroding nightlife scene: around 3,000 nightclubs closed from 2020 to 2023, according to the Night Time Industries Association (NTIA).
'We know that London's hospitality is the critical factor in attracting inward investment and making the capital the best in the world to do business so we need the mayor to have the tools on licencing, planning, skills, rates and rents to make a difference,' says Kate Nicholls, chairman of trade body UKHospitality.
The economy's woes have hit the housing market, too. House prices across the UK as a whole have risen by 4pc since the start of 2023, according to the Office for National Statistics. Yet the average price in London is down by more than 3pc.
All of this went unrecognised in the spending review.
When the Chancellor name-checked towns and cities across the Midlands and the north of England, as well as Wales, Scotland and Northern Ireland, her comments appeared to rile London's mayor.
'I have heard the concerns of my honourable friends the members for Mid Cheshire, and for Rossendale and Darwen, and the mayor of the Liverpool City Region, Steve Rotheram, that past governments have under-invested in towns and cities outside London and the South East. They are right,' Reeves thundered as she revamped investment rules to boost spending elsewhere in the country.
While Reeves meant the comment as a signal that investment was being rebalanced at long last, Sir Sadiq took it another way.
'The way to level up other regions will never be to level down London,' he said. 'I'll continue to make the case to the Government that we must work together for the benefit of our capital and the whole country.'
Reeves disputed his argument, noting rising police spending and a four-year £2.2bn fund for Transport for London, which runs public transport and the main roads. The Treasury called it 'the largest multi-year settlement for London in over a decade'.
Hall says the dispute is evidence of a split at the heart of the governing party, shattering Left-wingers' hopes that a Labour Government and mayoralty would herald a tide of new funding for London.
'Sadiq Khan has been completely shut out,' she says.
Sir Sadiq won a third term in last year's election with a commanding lead over Hall, taking the lead in nine of the 14 London Assembly constituencies. Yet he came away with less than half the votes cast, on a turnout of 40pc.
A split in Labour and dissatisfaction with the state of the capital raise the possibility his grip on power may not be unshakeable. Reeves' snub may not be just a disappointment for London – it could be a blow to the hopes of re-election for the city's Labour mayor too.