The Mayor of London and London Councils have come together with local leaders from business, education and the voluntary sector to launch a bold new plan to turbocharge economic growth and increase prosperity across the capital.
Developed together with London & Partners - in collaboration with businesses, trade unions and London’s communities - the London Growth Plan sets out a blueprint to kickstart the capital’s productivity, which has flatlined since the 2008 global financial crisis.
It aims to restore productivity growth to an average of two per cent a year in the next decade, which would make London’s economy £107bn* larger by 2035 and put an extra £11,000 on average in the pockets of the near-nine million Londoners. This would also mean the capital contributing an extra £27.5bn in taxes to the Treasury in 2035, providing vital revenues for investment in public services.
London’s productivity grew by an average of 3.16 per cent each year between 1998 and 2007, but between 2008 and 2022, average productivity growth was just 0.12 per cent a year. Growing productivity is the key to higher wages, higher living standards and increased investment in public services in London and across the UK.
The new plan focuses on inclusive economic growth to make sure that more Londoners can contribute to and benefit from the capital’s success. Helping more Londoners into work, bringing down housing costs and improving public transport are all vital to reducing poverty in London, improving living standards and driving growth. The plan aims to achieve a 20 per cent rise in the household weekly income (after housing costs) of the lowest earning 20 per cent of Londoners – which would mean more than a million London households would have an extra £50 to spend each week, on average, after paying for housing costs.
The London Growth Plan outlines huge opportunities for turbocharging the capital’s economy and harnessing the growth potential of sectors such as AI, life sciences, robotics, clean tech, quantum computing and the creative industries. Key drivers to deliver the plan’s growth ambitions for the capital include a renewed focus on nurturing world-class talent, helping Londoners get the skills they need for productive careers, backing business innovation with new investment and technology, taking a bolder approach to housing and infrastructure, and reinvigorating London’s local high streets.
A long-term strategic relationship between London and the UK Government will be a crucial part of delivering the plan. London is the engine of the UK economy and, with national support, this plan can harness its economic power and potential for the benefit of all Londoners and the whole country, helping to fund investment in public services across Britain.
Priorities in the London Growth Plan include:
- Backing business: London government will help to power ‘industrial innovation corridors’ around the capital - supporting new space, facilities and infrastructure to ensure innovation can thrive. This will build on the potential of the WestTech Corridor (anchored in White City going through Old Oak and Park Royal), the UK Innovation Corridor (anchored in the Knowledge Quarter going towards Cambridge) and the Thames Estuary (anchored in Queen Elizabeth Olympic Park going out to Essex and Kent). A new proposed London Tech and Inclusive Growth Fund could provide up to £100m loan and equity funding for high-growth small and midsize enterprises.
- Talent and skills: An Inclusive Talent Strategy will build the capital’s skilled workforce to unleash the potential of Londoners and - in turn - London’s economy. This will help create at least 150,000 high quality jobs, with a focus on fair pay and good work, to deliver Mayoral manifesto commitments. As well as supporting more people into work and ensuring all Londoners can get the skills or training needed to progress their careers, the strategy will help attract world-class talent to study and work in the capital. New rent-controlled Key Worker Homes will also help London to attract and retain its essential workforce.
- Housing and infrastructure: Local leaders will work with UK Government to extend and upgrade London’s public transport network, prioritising transformational projects to unlock new affordable homes and growth - including the Docklands Light Railway extension to Thamesmead, the Bakerloo line extension and the West London Orbital. The plan also calls for more devolution of London’s suburban rail services. This will be reinforced by the next London Plan, which will prioritise growth, increase housing delivery and ensure better digital connectivity.
- Inward investment and promotion: London will take the lead in implementing national reforms to the Local Government Pension Scheme, exploring the development of a major joint fund to invest in places that encourage innovation, including venture capital. The plan will also support London’s goal to be a net-zero city by 2030, attracting significant institutional capital for green infrastructure. There will be support to set up a new quantum tech incubator, London Life Sciences Week will be backed to become a key global event for the sector, and London leaders will explore a new business visitor centre to promote the capital’s world-leading offer by bringing companies together with agencies and developers.
- High streets and local economies: £21m additional funding this year will support boroughs with town centre regeneration, including potentially creating a publicly owned High Street Estate Agency to bring empty properties back into use. The plan also reiterates the Mayor’s commitment to revitalising neighbourhood policing so that the capital’s high streets always feel welcoming and safe.
Delivering the London Growth Plan will be a genuine partnership between the Mayor, local government leaders and central government, working in coalition with universities, incubators, accelerators, venture capitalists, innovation districts, corporate innovators, capital markets and international investors.
London’s leaders want central government to help unleash the capital’s economic potential by giving the Mayor and boroughs more freedoms to fund their own growth priorities, and the flexibility to spend money in the best way to drive good growth. This is on top of continuing to lobby the Government to secure agreements with our biggest international trading partners that ensure London’s key sectors can continue to grow and thrive.
Mayor of London, Sadiq Khan, said:
“This growth plan provides a golden opportunity to turbocharge growth and unlock London's full potential - for the benefit of all Londoners and the whole country."
“It's a blueprint for how we can help to create 150,000 good jobs, build more affordable homes, deliver major new transport upgrades and skill up Londoners for the well-paid jobs of tomorrow. From AI, life sciences and climate tech to our financial and creative industries, London is home to many of the best businesses in the world, which we want to back to grow and thrive over the next decade.
“Ultimately, growth means little if people cannot feel the benefits or see the positive change it brings to their area. So our goal is to deliver economic growth in every corner of our city that helps to raise living standards, puts more money in people's pockets and enables us to invest in our public services, as we continue to build a fairer and more prosperous London for all.”
Image credit: iStock
