London Growth Plan: two-minute read

London’s next reinvention

This growth plan is our vision for the next chapter of London’s story. We will build a more prosperous, fairer and greener city. We will build on our strength as a global beacon of openness, inclusion and the power of diversity.

There is a lot riding on our success. In the face of rising populism and protectionism, London must prove that, done right, economic growth in a global economy can make ordinary people’s lives better.

In this century of cities, London can lead the world by creating a new model for urban growth. The best days of this city are not in our extraordinary past, but in our exciting future as we reinvent London once again. 

 

The (recent) London story

London’s economy boomed in the nineties and noughties, surfing the waves of “big bang” deregulation of financial services and rapid globalisation. The financial crisis of 2007-8 hit London hard. But London embraced the digital revolution and added technology as a new driver of growth. The glorious summer of London 2012 Olympics was the city’s coming of age as the quintessential global city.

Then came the triple shock of the Covid-19 pandemic, Brexit and soaring inflation and interest rates. London has been resilient and recovered faster than the rest of the UK. But London’s challenges are evident: weak productivity growth, a housing crisis, high poverty rates despite a dynamic jobs market and public services suffering from underinvestment.

 

The backdrop for London’s next chapter

This plan is written in the context of six big shifts that will shape London’s reinvention over the next decade. They are structural changes in the London workforce, in part the legacy of Brexit and Covid-19; the transformation of work including flexible working, artificial intelligence and the gig economy; new spatial patterns of growth in London, as new places become growth hotspots; London’s emerging strength in frontier innovation; the climate emergency; and global politics reshaping trade patterns.

There is a more immediate context to this plan too. Interest rates are high. Government finances are very tight. Inflation is falling from its peak but continuing to squeeze living standards and profit margins.

Global competition is growing. Cities around the world are expanding and globalising fast. 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.

 

London’s growth ambitions

London’s first ambition is to raise productivity. An economy which is stagnating cannot fund the public services and investment needed to reduce poverty or address climate change.

But while we want to return to the growth rates of the nineties and noughties, we don’t want to return to the same growth habits. This time, our ambition is to create an economy that works for all Londoners, making our city more equal as well as more prosperous.

This growth plan sets out four bold ambitions:

1. Productivity: Raise productivity growth rates to 2% average per year over 2025 to 2035.
2. Inclusion: Raise the real household weekly income (after housing costs) of the lowest earning 20% of Londoners by 20% by 2035. This would mean that at least a million London households would have on average an extra £50 to spend each week after paying for housing costs.
3. Green growth: Accelerate progress towards achieving London’s net zero target for 2030.
4. A global capital: Grow London’s services exports by an average of 6% per year.

 

London’s strengths

London is extraordinary. We will start by building from our strengths.

 

London’s growth sectors and places

The bedrock of the London economy is and will continue to be selling services to the world. Our ideas, innovation, expertise and experiences are unbeatable. We will continue to grow our financial, professional and business services, creative industries, the experience economy and international education. London has led the world in transforming these sectors through technology and digital products. We are now exporting fintech, enterprise tech, creative tech and edtech on a global scale alongside traditional services.

London is also developing a new superpower: frontier innovation. We are evolving from a skilled adopter of innovation to a frontier creator of breakthrough technologies and solutions. This strategic shift comes at a crucial time when the city’s exceptional strengths in research, particularly in life sciences, AI and green technology, position us for leadership in global innovation.

We will grow these sectors by nurturing our existing world leading clusters and by growing new ones across the city. London’s city centre is a globally unique engine of growth and we will ensure it performs to its full capability.

Find out more about London’s growth sectors and places, and explore the map.

 

What we will do

London’s diverse, open-minded, skilled population is our greatest asset. But a shortage of skilled workers is one of the biggest constraints holding back London’s growth. The London economy cannot achieve its full potential until all Londoners achieve their full potential.

That’s why a vital task for this growth plan is an inclusive talent strategy. This will be London’s workforce plan to create the pipeline of talent for growth and to support marginalised Londoners into good work.

The growth plan sets out how we will use all the levers we have in London to achieve our growth ambitions. This includes backing our businesses from high streets to startups; investing in housing and infrastructure for growth, inclusion and climate; attracting investment and promoting London; and creating thriving local places.

 

How we will do it

Unlike some of our competitors, London is a global trading city in a liberal and multicultural democracy. This means that government alone cannot shape the new London.

We will create our future together: government at all levels; businesses large and small, local and international; trade unions and campaigners; entrepreneurs, inventors and creators.

To mobilise the city, we will take a “mission” approach to growth. A Growth Mission Board will bring together public and private sector leaders to oversee delivery.

The UK government’s most important mission is growth. London is the nation’s growth engine. The UK economy will not grow to its full potential without London firing on all cylinders. This needs a long-term, strategic partnership between London and the UK government to grow the London economy.

 

The role of the London Growth Plan

The London Growth Plan will be an important reference point going forward. It will help to focus everyone who can grow the London economy on a clear vision and plan. It will guide investors towards the priority opportunities in London. It will help to make London’s case for UK government investment and devolution. And it will give us shared stories to tell about London’s future growth.