Growth plan: Sadiq Khan wants to boost London economy by £100bn
Sir Sadiq Khan unveiled his plan to “turbocharge” London’s economy, claiming it could boost the capital’s coffers by £107bn by 2035.
The mayor unveiled what he’s called the London Growth Plan at Imperial College London’s campus, in a speech to council leaders, businesses and media.
Sir Sadiq’s plan for the capital aims to put an extra £11,000 a year in Londoner’s pockets and provide a further £27bn in tax revenue to the Treasury in 2035 by restoring productivity growth back to two per cent a year.
But the plan is dependent on the central government delivering more investment and furthering devolution powers in the capital, the mayor said.
Khan told reporters after the growth plan launch: “We do need more powers in London on a whole host of issues.”
But Conservative assembly member Alessandro Georgiou said: “It’s rich for the mayor to suddenly be talking up hopes of growth in London when his party’s budget has suffocated it so far.
“Labour’s national insurance rise is hitting Londoners in their pocket, costing their jobs, and hammering businesses across our capital.”
The document – developed by Khan, London’s councils, and City Hall’s growth agency London & Partners – is a blueprint to kickstart London’s productivity, which has flatlined at an average of 0.12 per cent a year since the 2008 global financial crisis, City Hall said
It states: “Global competition is growing. Cities around the world are expanding and globalising fast. In this century of cities, only a few will emerge as truly global centres for commerce, ideas and innovation.
“We are determined that London will be in the vanguard of that group.”
Khan also wants to raise real household weekly income rates of lower earning Londoners by 20 per cent by 2035, after housing costs; speed up progress towards achieving London’s net zero target for 2030; and increase service exports by an average of six per cent a year.
Actions will include: creating an inclusive talent strategy aiming to create 150,000 new jobs; supporting firms and SMEs across the capital, including to scale up and access finance and public sector contracts; creating a City innovation strategy to back frontier sectors such as life sciences and green innovation; and invest in a new quantum tech hub.
While other priorities are to: quickly build more homes; implement a housing and growth focused London Plan; stabilise transport funding and extend and upgrade the network; improve digital connectivity; explore new energy sources; and grow international travel.
In addition the mayor wants to tackle crime and anti-social behaviour; create an action plan for London’s nightlife; and launch a new £20m High Streets Fund to improve boroughs.
City Hall also wants to boost investment, including via getting Local Government Pension Scheme pools to support innovation in the capital, and to attract inward investment to the city, with “significant institutional capital for net zero infrastructure and real estate”.
Delivery of the ambitions will be overseen by a growth mission board, jointly led by City Hall and London Councils, which brings together the capital’s boroughs, with representatives from public and private sectors, businesses, universities and colleges.
The plan also calls on central government to give more powers to the capital to “retain and reinvest some of the upside of the growth it creates”, arguing that with this in place “much of London’s growth could pay for itself”.
Measures called for include holding to a bigger chunk of business rates; London being allowed to borrow against future tax income; and creating tax incentives for local investment.
“London also needs the freedom to spend its funding flexibly on the things that will drive growth,” the plan states, with City Hall arguing London is the “engine of the UK economy”.
Key growth sectors are identified as AI, life sciences, robotics, clean tech, quantum computing and the creative industries, while specific projects include new ‘industrial innovation corridors’, similar to the UK Innovation Corridor, from London towards Cambridge.
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.
“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.
“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 public services.”
While London Councils leader Claire Holland said London’s boroughs were “resolutely pro-growth and are committed to working with business, the mayor and national government to turbocharge growth in every corner of our city”.
Laura Timm, from the Federation of Small Businesses (FSB), welcomed the plan, noting “over 99 per cent of firms in the capital are small in size but significant in growth potential”.
And John Dickie, Chief Executive of Business LDN, said the plan had “bold ambitions” and “delivering on this agenda will require the city to double down on existing efforts to tackle barriers to inclusive growth such as housing and skills where we have the agency to act”.
He added: “The government needs to ensure London has the tools it needs to turbocharge growth and help the UK get out of the economic slow lane.”