Sadiq Khan, London’s mayor, has unveiled an ambitious initiative aimed at boosting the capital’s economy by over £100 billion within the next ten years.
Presenting what he refers to as the London growth strategy, Khan committed hundreds of millions in devolved funding to revive annual productivity growth in the London economy to pre-2008 financial crisis levels.
Focusing on sectors such as housing, transportation, workforce training, high street revitalization, and business assistance, he asserted that the plan would “accelerate” the productivity of the nation’s most significant economic center.
Among the key proposals is the allocation of over £300 million from central government for local skill development programs, targeting the creation of more than 150,000 jobs with an emphasis on fair wages and quality employment, fulfilling a commitment made during Khan’s re-election campaign for a historic third term last May.
The strategy also involves enhancements to London’s public transport system, including the extension of the Docklands Light Railway to Thamesmead in the southeast, expanding the Bakerloo line further south to Lewisham, and establishing a West London Orbital overground service using existing rail tracks.
A critical aspect of Khan’s goal to increase the London economy by £107 billion by 2035 will be revitalizing productivity growth that has stalled significantly in the UK and other developed nations since the 2008 financial downturn.
Productivity growth, which measures output per hour worked, is essential for improving living standards by allowing employers to offer higher wages. Previously, London experienced an annual productivity growth of about 3.16% from 1998 to 2007, but this rate dropped dramatically to an average of only 0.12% between then and 2022.
To achieve Khan’s objectives, productivity growth in London must average 2% annually from 2025 to 2035. Reaching the £107 billion target would result in an average increase of £11,000 for each of London’s nearly 9 million residents, while also providing an additional £27.5 billion in tax revenue to the Treasury by 2035.
However, this would require a significant departure from recent trends.
Although London is still the most productive area in the UK—surpassing the national average by over 25%—analysis from City Hall shows that the capital has experienced a much steeper decline in growth rates over the last 15 years.
Emphasizing the challenge ahead, London’s productivity grew only 1.5% in real terms between 2008 and 2021, compared to a total growth of 6.9% for the UK overall.
Recently, national productivity has been decreasing, and the Office for Budget Responsibility anticipates that the sustainable growth rate will reach only 1.25% by 2029. The latest regional data indicates that London’s productivity fell by 0.9% in 2022, marking the largest decline of any region.
Khan stated that his plan offers a crucial opportunity to spur growth and fully harness London’s potential, benefiting all residents and the nation as a whole.
“Ultimately, growth is meaningless if individuals cannot experience the advantages or witness the positive transformations in their communities. Therefore, our aim is to achieve economic growth across every part of our city that improves living standards, increases disposable income, and allows us to invest in public services as we strive to create a fairer and more prosperous London for everyone.”
The post New Vision for London: Sadiq Khan Targets £100bn Economic Boost by 2035 with Ambitious Growth Plan first appeared on London.
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Author : London News
Publish date : 2025-02-27 08:38:34
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