City of London Corporation warns that new heritage driven planning limits could erase 6,800 jobs and £1.2bn of annual economic output from the Square Mile. The loss would come from reduced office capacity in the eastern edge of the district.
Historic England is pushing for a larger uninterrupted sky gap around the Tower of London, arguing that the medieval site must remain visible from the east. Its proposal would force developers to tilt or truncate towers, removing the most valuable upper floors.
Tom Sleigh, planning chairman of the City of London Corporation, says stripping those floors would make many schemes financially unviable. He estimates up to 20 skyscraper projects could be cancelled, wiping out about 1 million square feet of office space.
Matthew Pennycook, housing minister, has called for a review, concerned the restrictions could jeopardise the Tower's UNESCO world heritage status. A planning inspector is now weighing Historic England's alternative design that asks buildings to "lean away".
The loss of premium office capacity could weaken London's appeal to multinational headquarters, a risk that matters to Canadian banks and pension funds that hold significant UK property assets. A slowdown in the City could also ripple through Canadian financial markets that rely on London's liquidity.
Existing height limits already protect views of St Paul's Cathedral. Adding another layer around the Tower would further compress the eastern edge of the Square Mile, where most new towers have been built.
Both parties say they are willing to work together to find a compromise that safeguards the heritage site while preserving economic growth.