New initiative aims to increase London’s productivity, raise household incomes, and generate £27bn in additional tax revenue for public services.
London’s leaders have unveiled a bold London Growth Plan designed to revitalize the city’s economy, raise productivity, and drive inclusive prosperity. The plan, developed by the Mayor of London and London Councils in partnership with businesses, trade unions, and local communities, sets out a roadmap to unlock growth potential across the capital.
By restoring productivity growth to 2% annually, the plan could expand London’s economy by £107bn by 2035, adding £11,000 more per year to the average Londoner’s pocket and generating £27.5bn in extra tax revenue to support public services across the UK.
Addressing London’s productivity slowdown
Since the 2008 financial crisis, London’s productivity has stagnated, with an average annual growth of just 0.12% compared to 3.16% between 1998-2007. The London Growth Plan aims to reverse this trend by tackling key economic barriers, ensuring higher wages, better living standards, and increased investment in public services.
One of its core goals is to achieve a 20% rise in weekly household income (after housing costs) for the lowest-earning 20% of Londoners. This would mean an extra £50 per week for over a million households, helping to combat poverty and improve quality of life.
Key pillars of the growth plan
The strategy focuses on five major areas to stimulate economic expansion and create a more inclusive economy:
- Backing Businesses & Innovation
Establishing ‘industrial innovation corridors’ in key areas like WestTech, the UK Innovation Corridor, and the Thames Estuary.
Launching a proposed London Tech and Inclusive Growth Fund, offering up to £100m in loans and equity for high-growth SMEs.
- Talent & Skills Development
Introducing an Inclusive Talent Strategy to create at least 150,000 high-quality jobs, prioritizing fair pay and good working conditions.
Supporting Londoners in acquiring the skills needed for the future economy, while also attracting top global talent.
Expanding Key Worker Homes with rent controls to retain essential professionals in the city.
- Housing & Infrastructure
Collaborating with the UK Government to extend and modernize public transport, unlocking new affordable housing developments.
Prioritizing projects like the Docklands Light Railway extension to Thamesmead, the Bakerloo Line extension, and the West London Orbital.
Calling for greater control over suburban rail services to improve connectivity and efficiency.
- Attracting Investment & Promoting London
Exploring a joint investment fund under national Local Government Pension Scheme reforms to support innovative businesses.
Strengthening London’s role in the green economy by attracting major institutional investment into net-zero infrastructure.
Establishing a quantum tech incubator and expanding London Life Sciences Week into a global event.
Investigating the creation of a London business visitor centre to showcase the city’s strengths to international investors.
- Revitalizing High Streets & Local Economies
Allocating £21m this year for town centre regeneration projects, including a publicly owned High Street Estate Agency to bring empty properties back into use.
Strengthening neighborhood policing to enhance safety and vibrancy in local business districts.
Call for Government Support & Devolution
London’s leaders stress that partnership with the UK Government is essential to unlocking the capital’s full economic potential. They are urging more investment and local decision-making powers to allow London to fund its own priorities effectively.
This includes lobbying for stronger trade agreements to support London’s key sectors, from AI and life sciences to finance and the creative industries.
Voices from London’s leadership
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.”
Cllr Claire Holland, Chair of London Councils, added: "The London Growth Plan is a blueprint to drive inclusive economic growth in the capital and across the UK, boosting productivity and ensuring more Londoners can feel the benefits of growth. “It sets out our ambitions to unleash growth in the industries of the future, deliver new housing and infrastructure to support the London economy, and develop a new Inclusive Talent Strategy, helping more people to get into work and get the skills they need to progress.
“Boroughs are resolutely pro-growth and are committed to working with business, the Mayor of London and national government to turbocharge growth in every corner of our city.”
Laura Citron, chief executive of London & Partners, concluded: “This is a huge moment for our city: a shared vision, a clear plan, and now the momentum to make it happen. As the capital’s growth agency, we’ll be working closely with investors, entrepreneurs, partners, and places across the city to drive growth for London and Londoners – attracting investment, scaling our businesses, bringing in visitors and world-class events, while telling London’s story brilliantly. Our city is built on reinvention, and this is our next big chapter.”
Universities & research hubs leading the charge
London’s top universities and research institutions will play a vital role in driving growth. The plan highlights UCL’s Person-Environment-Activity Research Laboratory and Imperial College’s recent investment in the WestTech innovation corridor as examples of specialist spaces fostering cutting-edge research and business development.
A new era for London’s economy
With widespread support from business leaders and policymakers, the London Growth Plan lays the foundation for a stronger, more inclusive economy. By fostering innovation, investment, and infrastructure, the initiative aims to propel London—and the entire UK—into a new era of sustained economic success. Read more at www.growthplan.london
Photo by Joe D, Wikimedia commons.